At JAKKS, we look for ways to add unique technology, new play patterns and top licenses to old favorites to make them better and more applicable for today’s time. Our Vivid Velvet® line is a prime example. Essentially, we infused the line with innovative and creative new features. We found success with Vivid Velvet poster activity sets and back-to-school products, and are expanding printed velvet onto new mediums and materials, including sun catchers, jewelry boxes and even fabric design-your-own purses.

Our expanded and improved upon line of Pentech professional writing instruments and office supplies for school or work can be found at office superstores and drugstore channels. This is an example of how we strive to have diversified product offerings and retail distribution to offset seasonality and shifts in consumer buying patterns.

In 2005, we are introducing a revolutionary new pencil under our Pentech brand, called Ultra Sharp—a pencil that never needs to be sharpened—as well as new paper products and other stationery items. We have new marketing and product development teams whose goal is to grow both our activity and stationery businesses and have already made strategic partnerships with Office Depot, one of the top office superstores in the nation, and other key retailers for this category.

Other new introductions for 2005 include activities based on beloved properties, My Little Pony™ and Care Bears, and our new compound Splish Splat®, based on the Nickelodeon game show, is a new twist on a classic play pattern.

Also for 2005, we are working to improve on our existing lines with new technologies and licenses, and increasing our marketing, advertising and product development efforts across all of JAKKS’ product lines and categories. We believe our commitment will result in revenue growth, an increasingly diversified product portfolio, expanded shelf space and top-selling products for JAKKS Pacific.